Quarter after quarter, earnings were down, and costs were way out of hand as the company first invested in public relations counterprogramming, then legal fees, then more PR and legal fees, then payoffs to angry and frustrated customers. Amid all of that, the once proud brand suffered a catastrophic loss of consumer trust. Management was restructured, and Volkswagen began to work on a way out.
In the early going, there wasn’t much light at the end of the tunnel. Now, though, that light is shining brightly. VW recently forecast stable earnings for the year, thanks to “record” sales of its luxury brands, Audi and Porsche. Hitting it out of the park in these two high reward segments allowed VW to earn the highest annual underlying operating profit in the company’s history.
Part of the credit for the win goes to a successful restructuring of corporate protocols and business streams. The flagship company brand is leaner and much more efficient than the version that tried to treat emissions tests.
That was an excellent first step in righting the ship; keeping costs lower and production higher has enabled the company to focus on what is still working while fixing what it broke. VW stopped the bleeding, so it could focus on getting the entire operation back in shape, one segment at a time.
If Volkswagen continues its climb back to prominence, it could very well be the comeback of the decade. New management has the company poised to rebuild its reputation across all market segments, even as it continues to do very well in its luxury lines. There was a time when VW was hugely popular in the United States. There were many strong reasons for that. Good engineering, high quality, and attractive vehicles across many different price points. The emissions scandal got in the way of all of that. Now, VW can move beyond the damage and remind consumers why they used to love the brand so much.
One key public relations angle not really explored — yet — is the nostalgia factor. Bugs and Westfalias, among other brands, have massive and dedicated followings. Shows are hosted across the country to celebrate these brands. These factors can be leveraged to increased positive PR for VW, and create fun reminders of why there’s so much love for this brand.
Ronn Torossian is CEO of 5WPR, and one of America’s most high-profile Public Relations executives.